ii view: National Grid earnings impress amid record investment

Shares in this major utility company are up broadly in line with the FTSE 100 index year-to-date. Offering an attractive dividend yield, we assess prospects.

5th November 2026 15:55

by Keith Bowman from interactive investor

Share on

First-half results to 30 September

Adjusted operating profit up 13% to £2.59 billion
Adjusted earnings per share (EPS) up 22% to 36.5p
Interim dividend up 3.8% to 16.97p per share
Net debt of £48.6 billion, up from £44.1 billion in late March

Guidance:

Now expects growth in full-year adjusted EPS of 15-16%, up from a previous 13-15%
Continues to expect compound annual growth rate in adjusted EPS of 8-10% over next five years

Chief executive Zoë Yujnovich said:

“We’re working to get more from our existing networks, including through scaled use of technology and innovation.

“Our capital delivery will underpin economic growth, electrification, and energy security, supporting long term affordability and reliability. In the UK, our planned £40 billion capital investment will help reduce system constraint costs for the benefit of consumers, and support more than 60,000 jobs.”

Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

ii round-up:

National Grid (LSE:NG.) today reported earnings that beat City forecasts, with the utility company increasing annual earnings growth forecasts, buoyed by an ongoing major investment programme.

Adjusted earnings per share (EPS) for the six months to late September rose 22% to 36.5p, aided by record first-half investment expenditure of £6.7 billion. Analysts had forecast earnings of 35.1p per share. An interim dividend of 16.97p, payable to eligible shareholders on 12 January, is up 3.8% from a year ago.

Shares in the FTSE 100 company rose 2% in UK trading having come into these latest numbers up by around a tenth so far in 2026. That’s similar to the FTSE 100 index during that time. Major wind farm operator SSE (LSE:SSE) has risen by around a fifth year-to-date.

National Grid operates in the UK and across the eastern coastal states of the USA. Planned investment of £70 billion to modernise and expand networks continues to support expected compound annual growth in adjusted EPS of 8-10% over the next five years.

Investment expenditure of £13.5 billion for the FY 2026 is now forecast to fuel growth in annual adjusted earnings of 15-16%. That’s up from a previous 13-15%. The City had expected 2026 investment expenditure nearer £12 billion.

Group net debt of £48.6 billion as of late September rose from £44.1 billion in late March, although analysts forecast a rise to £49.5 billion.

Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares post the results, highlighting National Grid as a ‘top pick’ with a price target of 1,400p.

ii view:

National Grid operates primarily in the transmission and distribution of electricity in the UK and the US. Its divisions include UK electricity transmission, UK electricity distribution, as well as divisions for New York and New England in the US. Geographically, the UK made most profit in its last financial year at 63%, with the US the balance.

For investors, negotiations with UK and US regulators offer regular periodic uncertainty. Operational incidents and potential fines such as last year’s fire at a substation at Heathrow airport are not to be forgotten. Adjustments to taxes and capital allowances made by governments can impact financial performance, while environmental considerations include potential new pylons across green fields and near homes.

To the upside, and given a degree of predictability for energy usage, National Grid can offer reliable five-year financial predictions which few other companies can. Major investment in the group’s core transmission business is being made to help connect renewable generation such as offshore windfarms. Geographical diversity includes exposure to the US, while a previous £7 billion rights issue has strengthened the group’s balance sheet.

In all, and with the shares boasting a dividend yield near 4%, this broadly defensive utility company continues to remain worthy of its place in many investor portfolios.

Positives:

Attractive dividend payment (not guaranteed)
Geographical diversity

Negatives:

Subject to regulatory decisions
Subject to currency movements

The average rating of stock market analysts:

Strong hold

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Get more news and expert articles direct to your inbox